The bill, passed by the Democratic-controlled legislature, now requires the approval of Governor Jerry Brown, a Democrat, who is expected to sign it into law shortly.
Under the bill, judges could override contract clauses that require customers to settle disputes through arbitration in cases where a bank commits fraud using customers’ personal information.
Mandatory arbitration clauses, which have become standard practice since a 2011 U.S. Supreme Court decision, make consumers agree not to sue in the future as a condition of purchasing products or services.
